- The U.S. monthly employment report comes in much weaker than expected.
- Exante’s Victor Argonov says jobs report won’t change Fed’s tapering plans.
- The U.S. Fed is likely to announce its schedule for tapering on November 3rd.
The U.S. economy added far less jobs in September than expected, the United States Bureau of Labour Statistics said in its employment report this morning.
According to the Labour Department, U.S. employers added 194,000 jobs last month versus a sharply higher 500,000 expected – an indication that the effects of the pandemic on the job market were are from over.
Not a complete disastor
September marked the second straight month for the U.S. economy to see a significantly lower-than-expected growth in employment.
Ahead of the jobs report, Exante’s Victor Argonov said in a statement that it would “take a colossal miss” in the jobs report for the US Federal Reserve to change its tapering plans. Argonov added:
Even if it misses the mark by a good few-hundred-thousand, we don’t think it would raise much doubt over the Fed’s plans to reduce its bond buying programme.
Argonov told Invezz that the headline jobs number of 194,000 does not paint a full picture. He said in an e-mail some of the other aspects of the report were “strong”.
These include an improvement in the unemployment rate at 4.8% and better-than-expected wage growth at 0.6% versus estimates of 0.4%, he wrote. Argonov added:
So, it wasn’t a “colossal” miss as the headline number suggests. As such, it probably won’t make a difference to the Fed’s tapering plans. Indeed, bond yields have risen to new weekly highs, suggesting the market also agrees with this view.”
The U.S. Federal Reserve is scheduled for a meeting on November 3 when it is expected to disclose the timing and intensity of tapering.